Mumbai: Tata Chemicals (TCL) today said its UK subsidiary, Brunner Mond, has inked an agreement to acquire British Salt Ltd for 93 million pounds (about Rs656.48 crore), reports PTI.
“TCL’s wholly owned subsidiary Brunner Mond, UK, has signed a binding agreement to acquire a 100% stake in UK-based British Salt Ltd, subject to requisite regulatory approvals,” TCL said in a filing to the Bombay Stock Exchange.
The acquisition will be financed entirely through debt, with no recourse to TCL, the filing added.
Pure dried vacuum salt manufacturer British Salt owns brine wells in the UK with a residual life of 50 years and is also active in the gas storage business. The buy-out will ensure long-term supply of brine for soda-ash manufacturer Brunner Mond’s operations, the filing said.
The number of M&A deals this year has surpassed that in 2007, after a lull due to the financial crisis
The number of merger and acquisition (M&A) deals involving Indian companies is seeing a revival signalling the appetite of Indian business for growth at home and abroad. According to PV Sahad, founder and publisher , VCCircle, there have been over 700 M&A deals worth $54 billion in 2010, which surpasses the glorious days of 2007 after which there was a slump due to the global financial crisis.
Half of the deals were domestic deals, like Tech Mahindra's acquisition of Satyam Computers for $578 million . The other half consisted of outbound deals like the Bharti takeover of South Africa's Zain valued at $9 billion. Outbound deals were twice the number of inbound deals. An example is US major Abbott's acquisition of Piramal Healthcare's solutions (domestic formulations) business for $3.72 billion to become the largest drug maker in India.
This was the subject of the VCCircle Dealmakers conclave 2011 last week, at which several M&A industry leaders shared their insights. The desire for acquiring competency, technology, and brand are some of the reasons for M&A. The issues of culture, integration and redundancy of resources are by-products after the deal is closed that can make or break the deal.
Although 70% to 80% of M&A fall short of their objectives, the urge to grow faster than industry is a lure for M&A. Is it vanity or sanity? According to Rajesh Sahwney, president, Reliance Entertainment, “We acquired Adlabs for a platform to scale up. It was not about their theatres, but the inside view of the industry that we wanted to get.”
Cost of capital is an important aspect in M&A. According to Rajiv Saxena, head M&A, Essar group, "We have built a strong in-house team for making due diligence. We prepare a checklist of assessments for dealing with each risk in a proactive way. The synergy evaluation analysis is important. The cost of capital has to be planned and can't be overlooked in a hurry for closing a good deal."
Bharti's Zain buy was a big outbound deal in recent times, while Reliance Communication's MTN deal did not go through. In 60% of the cases the M&A process takes over two years. According to Aditya Sanghi, managing director of investment banking, Yes Bank, "The breakdown of resistance, easing fears of job cuts/relocation and government apprehensions take time to address. The local environment knowledge is extremely important."
Dr Om Manchanda, chief executive officer, Dr Lal Pathlabs, shared an anecdote about a Delhi-based lab whose owner had been discussing about a deal with him for over a couple of years, without making up his mind. It is difficult for first-generation entrepreneurs to give up control of their own creation that can lead to uncertainty for employees.
There are various reasons why a company is open for some form of buyout by another company. There could be succession issues with the next generation not wanting to take it on. Some companies from the 1980-90s are fatigued. Others may have money, but need professional management to take the company to the next level.
A strategic buyout will bring in money, but the entrepreneur will have to give up control. The PE buyout may retain operations control with the entrepreneur and at the same time help scale up the company to the next level with operational expertise and better internal governance. According to Sandeep Naik, co-head, Apax Partners, "PE funding is an expensive option. It is one of various funding options available. It is not the best option for a company looking only for monetary reasons."
According to Gopal Srinivasan, managing director, TVS Capital Funds, "I am optimistic about domestic M&A. There are M&A opportunities in midcap sector. Pharma and auto are good target sectors. Ssangyong acquisition by M&M was a good deal. Makemytrip has been a success story."
The rise in the number of outbound deals indicates that corporate India is consolidating and at the same time aggressively working on global expansion. The domestic deals increase is encouraging and supports the argument that Indian entrepreneurs are more willing to let go of control to another Indian company in line with the Western outlook of being dispassionate in business. Inbound deals are expected to grow next year. M&A deals are becoming a big deal.
The Radia tapes were surely the big surprise of the year in India, where railway ticket booking was still the dominant internet activity. Actresses Aruna Shields and Sonakshi Sinha were the most-searched names and a record number asked 'How to get pregnant'
2010 was a very eventful year for the internet and social media. From frenzied Twitter activity that followed the British Petroleum oil spill in the Gulf of Mexico, to the Niira Radia tape leaks in India, there was a lot that kept internet users hooked. It was a year of increased hacktivism and cyberpolitics, which culminated in the recognition to Facebook founder Mark Zuckerberg as Time magazine's Man of the Year. Many would have wanted that for much-applauded Wikileaks chief Julian Assange.
India recorded a huge jump in internet usage during the year. According to the Internet and Mobile Society of India, there were around 60 million internet users, with 7.4 million broadband connections in 2009. Although the 2010-2011 report isn't out yet, statisticians are certain that internet penetration has increased in the country and that much of this has been in rural India. At the Pitch CMO Summit 2010, Sanjay Behl, CEO, Big TV & IPTV and brand head, Reliance Communications, said that judging by the internet growth in India, there could be 100% wireless coverage in the country by 2030. But what are Indians doing on worldwide web?
According to Google Zeitgest 2010, which documents countrywise and global search trends, the most-searched items were songs, Facebook, Google and YouTube. In India, IRCTC (railway ticket booking) continues to top the list of fastest rising bracket year-on-year, followed by low-cost phonemakers like Micromax and YouTube video.
In people, British actress of Anglo-India descent Aruna Shields (no we don't know her either) and Dabaang sensation Sonakshi Sinha topped the queries, while much-hyped Kites beat Rajinikanth's Endhiran -don't ask how. Nokia, Samsung and Airtel remained the most searched brands.
But would you guess what took the cake? It was India's 'how to' question of the year: 'How to get pregnant'! Indians also searched 'How to Kiss', 'How to Impress a Girl' and 'How to Improve Spoken English'.
Globally, Chatroulette, a Russian chat site where one can talk to strangers, dominated searches, beating even Facebook and Twitter. iPad and Justin Beiber followed close. There was a declining interest in swine flu and New Moon (the 'Twilight' fantasy romance novels).
The year started with the epic battle between Internet giant Google and the Chinese government. China alleged that Google had violated the agreed norms of censorship, and was redirecting mainland users to the unrestricted website in Hong Kong. China's response to this "disagreeable behaviour" was to hack into many email accounts of human rights activists and the attack on several other websites in India, Germany and the US. Provoked, usually tight-lipped Google threatened to withdraw its search engine from China and close its operations there. To add to the tension, a Wikileaks cable revealed that Google's competitor Baidu was collaborating with the Chinese government to sabotage its operations. This led to Google's partial withdrawal from China. The issue remains unresolved, with Google retreating into silence and China alternating between assuring Washington about stability of diplomatic relations and remaining vocally hostile to Google.
But Google's worries did not end there. Soon afterwards, the European Union (EU) started an anti-trust investigation against the internet search giant, based on complaints of other service providers about unfavourable treatment of their services in Google's unpaid and sponsored search results, coupled with preferential placement of Google's own services. The EU has confessed, however, that it has yet to come across any proof on these allegations. Google has maintained silence on the issue, but there have been whispers that other service providers were looking for an investigation as a ploy to decode Google's secret and highly-advanced search mechanism.
India, however, was busy with its own share of issues. When the government was already having a bad time with the Adarsh Housing Society and the Commonwealth Games scams, Outlook and Open magazines leaked tapes of conversations between corporate lobbyist Nira Radia and several political leaders, government officials, prominent businessmen and even journalists.
The conversations exposed fixing of ministerial portfolios at the highest level, doctoring of news by journalists, who have become household names, and media houses on the directions of corporates and politicians. The information heightened the pressure on the government struggling over the 2G spectrum allocation scam, forcing the already-delayed exit of telecom minister A Raja. The disclosures sealed the longest parliamentary deadlock in the nation's history, as the opposition battled the ruling coalition without even a single day of proper business being transacted in the winter session.
Such was the impact of the information, that Ratan Tata petitioned the Supreme Court to try and prevent further leaks, arguing that the conversations were a breach of his privacy. Instead, more tapes have been released on the Web and the situation could only get more embarrassing for all those involved.
This year, India-Pakistan rivalry spread to the cyber space as well. On the second anniversary of the 26/11 Mumbai terror attacks, a group of hackers, self-titled as 'Indian cyber-army', hacked 35 Pakistani government websites and posted a picture of the US army's flag-hoisting in Iwo Jima during World War II, after changing the colours of the flag to the Indian tricolour. The reaction followed swiftly, as several Indian websites were attacked by hackers calling themselves the 'Pakistani Cyber Army', and posting 'Pakistan Zindabad' slogans on these sites. The website of the Central Bureau of Investigation was among those hacked and is inaccessible even three weeks after the incident.
Undoubtedly, the subject that took the world by storm was Wikileaks. Australian programmer and activist Mr Assange made a grand entry earlier this year with the release of US secret documents on Afghanistan. While a red-faced American government busily fended off questions from all corners, Wikileaks chose to strike again. This time, the blow was bigger and many more countries were affected. From the EU to India, Morocco to Russia and Vietnam, governments tried frantically to block out the information revealed.
When the Wikileaks website was attacked by hackers soon afterwards, supporters created numerous mirror sites where these cables were available. Amid cries of outrage from average people and activists, the Interpol launched a witch-hunt for Mr Assange that resulted in his arrest on charges of rape, in Sweden. He has since been released on bail. Mr Assange might continue to be pursued by the authorities, but the cyber-soldiers inspired by his campaign are unlikely to give up easily.
2010 was also the year of The Social Network, for both films and the media overall. Facebook and Twitter registered a huge leap in registrations. The Facebook membership has reportedly touched a jaw-dropping 500 million, while Twitter boasts 145 million users. Facebook strengthened its foothold in India and South Asia, virtually wiping out Orkut in the region. But Facebook could have a new challenger in Chatroulette.
The top 10 Facebook trends of the year were: HMU (a feature called 'hit me up'), the football world cup, movies, iPad and iPhone 4, Haiti, Justin Bieber, Games on Facebook , Mineros/Miners, Airplanes and 2011. Zuckerberg unveiled Facebook's new email service with the claim that it would mark the end of other email services.
In Twitter trends, the Mexico oil spill and the Haiti earthquake were the biggest news stories this year. The FIFA World Cup with its vuvuzelas and psychic Octopus Paul caught the attention of the world for a couple of months. iPad and Android were the technology buzz. The rest, as one might expect, was entertainment: Christopher Nolan's hit movie Inception, Justin Bieber and Harry Potter.
Lady Gaga beat Britney Spears as the most-followed person on Twitter. Twitter also saw the infamous war between Shashi Tharoor and Lalit Modi that opened the doors on the IPL mess, leading to Tharoor's resignation as minister and Modi's suspension from the powerful Indian cricket board. Twitter also hosted some closely-watched Bollywood battles and patch-ups between Sonam Kapoor and Shobha De over I hate Luv Stories, and Amitabh Bachhan and Mani Ratnam over Abhishek's performance in Raavan.
With increasing internet penetration, more people are expected to connect through social network websites. Like the rest of the world, India is showing a healthy increase in online shopping figures, hence more companies are advertising on internet and social media websites. IAMAI-IMRB estimates online ad revenue for 2010-11 at Rs990 crore compared to Rs785 crore last year. Travel, BFSI and telecom account for half the revenue.
With the buzz on the Web getting louder, business on the internet ought to get better in the new year. It's always been interesting and now it's getting more exciting to see how people are finding newer ways to talk and do business.
Raise a toast to all netizens!